MiTT SWaMi: THe LBO LoVe GuRu...

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ZOMBINOMICS 101: LBO Job Creation

STEP 1: Find underpriced and under leveraged public companies that are generating tons of excess cashflow. Borrow tons of money to purchase them and take them “private.” Pay yourself tons of closing and management fees.

STEP 2: Strip and sell off non-core assets. Maximize operating efficiencies (a euphemism for restructuring the workforce, i.e., you’re fired!) in order to service tons of new debt, pay yourself ongoing management fees and special dividends.

STEP 3A: Wait for the right opportunity to exit via a strategic sale or IPO. Collect more fees. Fire some more employees for good measure.

STEP 3B: Blow the company up and liquidate everything. Collect more fees. Fire all the empoyees.

STEP 3C: Bankruptcy– pass the whole piece of junk your distressed asset team. Collect more fees. Somebody’s going to get fired.

Job Creation: Hire more associates and analysts to look for more LBO deals.

Q: Hey Banzai, private equity doesn’t work that way anymore, right? There’s just too much competition for too few deals.

A: Perhaps, but this is how it worked when Swamney was the…LBO LOVE GURU!

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This LBO Swami from Bain
Got rich from inflicting much pain
He worships The Green
His wealth is obscene
His morals were sold for a gain

The Limerck King

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